Journal Article

African leaders and the geography of China's foreign assistance

Date Published

Apr 23, 2019

Authors

Axel Dreher, Andreas Fuchs, Roland Hodler, Bradley C. Parks, Paul A. Raschky, Michael J. Tierney

Publisher

Journal of Development Economics

Citation

Dreher, A., Fuchs, A., Hodler, R., Parks, B. C., Raschky, P. A., & Tierney, M.J. (2019). African Leaders and the Geography of China's Foreign Assistance. Journal of Development Economics, 140.

Note: A version of this article was previously published as an AidData Working Paper.

Announcement

We investigate whether foreign aid from China is prone to political capture in aid-receiving countries. Specifically, we examine whether more Chinese aid is allocated to the birth regions of political leaders, controlling for indicators of need and various fixed effects. We collect data on 117 African leaders' birthplaces and geocode 1650 Chinese development projects across 2969 physical locations in Africa from 2000 to 2012. Our econometric results show that political leaders' birth regions receive substantially larger financial flows from China in the years when they hold power compared to what the same region receives at other times. We find evidence that these biases are a consequence of electoral competition: Chinese aid disproportionately benefits politically privileged regions in country-years when incumbents face upcoming elections and when electoral competitiveness is high. We observe no such pattern of favoritism in the spatial distribution of World Bank development projects.

Axel Dreher

Axel Dreher

Professor of Economics and Chair of International and Development Politics at Heidelberg University

Andreas Fuchs

Andreas Fuchs

Professor of Development Economics at the University of Goettingen

Roland Hodler

Roland Hodler

Professor of Economics at the University of Lucerne

Bradley C. Parks

Bradley C. Parks

Executive Director

Mike Tierney

Mike Tierney

Co-Director of the Global Research Institute and Hylton Professor of Government and International Relations at the College of William & Mary